Lilongwe house scam

The Lilongwe City Council (LCC) has for a year ignored directives from government and the National Audit Office (NAO) to withdraw the sale of its nine houses meant for senior managers which were sold in questionable circumstances in 2006, Nation on Sunday has established.

The council’s intransigence has forced the Ministry of Local Government and Rural Development to threaten penalties for individuals involved in the sale.

The houses, which included residences for the mayor and chief executive officer, were sold to Democratic Progressive Party (DPP) president Peter Mutharika, former president Bingu wa Mutharika through his Bineth Trust and former LCC chief executive officer the late Donton Mkandawire, among other buyers.

NAO argued that the disposal of the real estate was irregular for two key reasons: The beneficiaries had never been sitting tenants of the houses at the time of the sale or at any other point and the houses were sold below their real values; hence, the need to reverse the transaction.

Six houses were sold at a value totalling K26 million (US$63 882).

Following NAO’s recommendation to reverse the sale, the council sought professional advice from the Ministry of Local Government as its parent ministry.

However, even after the ministry ordered LCC to comply with the recommendation, the council has developed cold feet and sat on the issue.

Spokesperson for Local Government and Rural Development Muhlabase Mughogho confirmed that the ministry directed LCC to follow and implement NAO’s recommendations.

“The response on the matter was sent [to LCC] in June 2013,” said  Mughogho.

She said the ministry is concerned that the issue has stalled, arguing that the ministry expected the council to take the required steps after the directive.

Asked what will happen if the council does not implement the recommendations, Mughogho said the officers who approved the sale will be held accountable.

“Individual officers who approved the sale of the houses will be surcharged by the ministry,” she said.

LCC spokesperson Tamara Chafunya confirmed having been advised by the ministry on the way forward, but said the matter was redirected to NAO.

“As a council, we forwarded the response from the ministry to the National Audit Office and it is now up to them to decide. That is all I can say,” said Chafunya.

For two weeks, NAO public relations officer Thomas Chafunya has been evading our questions on the matter.

But Peter Mutharika’s personal assistant Ben Phiri said since the issue started making headlines in the media, the DPP president has never received any communication from the responsible authorities.

“We have never, at any point, received any form of communication from anybody. Since the issue started, it has just been debated in newspapers and radios, but as the accused party we have never been communicated to by either the council or ministry,” said Phiri.

He said he doubted if the council would penalise his boss, insisting he followed all the necessary procedures in buying the house.

“Surely, if there were irregularities on our part in the manner the house was bought, we would have by now received communication advising us on the next course of action. People calling themselves activists have mobilised youths to demonstrate in the streets, they have been paraded on MBC TV, they have gone on air calling for government to get back the houses, but nothing official has come to us on the matter,” said Phiri.

In 2013, Phiri told our sister paper Weekend Nation that Peter Mutharika met all the requirements in buying the house and LCC officially wrote him in April 2008 informing him that he had been offered the house, Number 457 on Ulendo Road, in Area 10 in the city.

Phiri also produced an independent valuation report for the house Mutharika bought which was done by Property Management Development Evaluation  and showed that the three-bedroomed house was “in a bad repair state and has been extensively vandalised.”

“They must find a legal way of getting it as it was purchased in a legal way as well. Otherwise, political utterances, political powers or cheap politics from those that claim to know of the alleged influence has no basis,” he said.

Government planned to allocate the houses to the incoming mayor and some councillors after the May 20 elections.